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Briggs & Stratton's 4Q Profit Soars on Lower Costs
WAUWATOSA, Wis. — Briggs & Stratton Corp. (BGG) posted a surprise profit on falling costs while weak demand continued for the outdoor power-equipment maker.
The company also forecast a bigger sales drop than analysts expected in the just-started fiscal year and revenue for the latest quarter missed views. It sees earnings of 80 cents to $1.01 a share and a revenue decline of 4%, while analysts were looking for earnings of 87 cents a share and a revenue drop of 2% to $2.19 billion, according to a survey by Thomson Reuters.
Briggs & Stratton and its rivals have cut costs and production to offset slumping demand as consumers make fewer big discretionary purchases.
For the quarter ended in June, the company reported a profit of $5.3 million, or 11 cents a share, up from $500,000, or 1 cent a share, a year earlier. The latest results included a 7-cent restructuring charge, while the prior-year had a 16-cent restructuring gain.
Revenue decreased 16% to $482.8 million.
Analysts polled by Thomson Reuters were looking for a loss of 5 cents a share on revenue of $545 million.
Gross margin rose to 17.7% excluding charges from 16.5% amid lower commodities costs.
Briggs & Stratton's engine business saw a 14% revenue drop on shipments of lower-priced goods, lower total volume and currency impacts.
At its power-products business - which makes products such as lawnmowers and pressure washers - revenue dropped 21% on lower shipments and the lack of storm-related need for generators.
Shares closed at $17.02 on Wednesday and didn't trade premarket.
